Home sales slump on Oahu

This house in Waimalu sold last month for $599,900, just above the October median price of $595,750 for single-family homes. The house has four bedrooms, one bathroom and 1,760 square feet of living space. It was built in 1967 and remodeled in 2005. It previously sold for $615,000 in July 2005. The recent seller initially listed the home in January 2009 for $690,000. This past January the home was relisted for $620,000, then relisted again in August for $599,900.

Median prices barely changed for previously owned homes sold last month on Oahu, but the number of sales fell hard after being pumped up last year by a federal tax credit aimed at breathing life into deflated housing markets around the country.

The Honolulu Board of Realtors reported yesterday that the median price of existing single-family homes sold in October ticked down 1.4 percent to $595,750 from $604,500 in the same month last year.

But the number of sales slumped 17 percent to 241 from 290 in the same period.

The volume decline was larger for condominium sales -- a 21 percent drop to 310 last month from 394 a year earlier, while the median price was unchanged at $300,000.

The drops upset a trend of rising sales this year but don't appear to reflect weakness in demand.

Brian Benton, president of the real estate agent association, said the big decline in transaction volume last month was affected by unusual activity a year ago driven by the tax credit program deployed to encourage more home purchases amid the recession.

HOME SALES

The number of homes sold on Oahu in October with the median price and percentage change from the same month last year:

HOMES

SALES

MEDIAN PRICE

October 2010

241

$595,750

October 2009

290

$604,500

Pct. change

-16.9%

-1.4%

CONDOS

SALES

MEDIAN PRICE

October 2010

310

$300,000

October 2009

394

$300,000

Pct. change

-21.3%

0%

Source: Honolulu Board of Realtors

"These numbers are not surprising when you consider that last year at this time we were at the height of the first-time homebuyer tax credit frenzy, which stimulated real estate sales in what is typically a slower period in the market," he said in a statement.

Typically, October is a shoulder month for home sales. Since 2005, October hasn't been among the top five months for single-family home or condos, as spring and summer months account for the most home sales.

But last year there were more single-family home sales in October than in any other month. December, which typically is another slow month, had the second-most sales last year. For condos last year, October had the second-most sales after November.

Benton and other industry observers say home-buying has returned to a more normal seasonal pattern this year.

Even with the October decline, the number of sales for the first 10 months of the year is still up significantly: 15.6 percent for single-family homes and 16.3 percent for condos.

The Board of Realtors also noted that the average number of days single-family homes spent on the market before an offer was accepted by a seller reached a point last month -- 35 days -- that hasn't been lower in any month since December 2005.

Ricky Cassiday, a local housing market analyst, said Oahu's condo market showed signs of improvement last month compared with earlier this year, while the single-family home market looked soft.

"It's not exactly a bad picture," he said. "Sales are decent."

The velocity of sales is being advanced by falling inventory of homes as fewer homes are put on the market, Cassiday noted. Meanwhile, buyers and sellers continue to adjust their perceptions of market prices.

For example, one sale last month involved a roughly 40-year-old house in Waimalu. The four-bedroom home previously sold for $615,000 in July 2005 and was renovated, according to sale and listing records. Then the owner listed the home for sale in January 2009 at $690,000. This past January the home was relisted at $620,000, then relisted again in August for $599,900, at which price it sold last month.

Overall, median home prices are on pace to eke out small gains for the full year over last year. For the first 10 months of this year, the median single-family home price is up 3.1 percent to $598,000. The median condo price for the same period is up 0.3 percent to $305,000.

If the small rises in median prices are carried through the end of the year, they would reverse two years of modest declines for single-family homes -- 3 percent in 2008 and 7.9 percent last year -- and a one-year decline of 7.1 percent for condos last year.

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